I didn't want to give the impression Mr.Stephen Pearce is working for the administrators, i was merely pointing out he's still active in accounts as an "accountant" while the club is in administration.
I don't want to confuse anything here, i was just highlighting the fact if a number of people were responsible for a situation, that situation went wrong i don't think i would want them to play any role in a viable solution to move forward.
@HomerLone said:
I was curious as to when the ownership of Pride Park was transferred outside of the Derby County companies "structure".
Having just noticed this is in the rules regarding Administrators duties, I was curious if it was applicable.
"The liquidator or administrator can also apply to court seeking an order to restore any disposition of company property which contravenes the relevant provisions of the IA 1986, being IA 1986, s 127 (only in a compulsory liquidation) and IA 1986, ss 238, 239, 240 and 423—these are generally referred to as antecedent transactions. Therefore, a liquidator or administrator can make an application to court to unwind transactions entered into before the company was wound-up or entered into administration. Whether the particular transaction will be unwound will depend on its own circumstances".
Just a thought.
Thanks for this Homer. It's something we can push at Quantuma (DCFC Admins). I think we can all agree DCFC overspent big time. That's down to Mel in the main and in part tp Stephen Pearce who, as CEO, ought to have kept Mel in check or resigned, IMO. When Pearce resigned from the EFL board, his place was taken by one of the Middlesbrough directors. Both EFL and Quantuma appear to be saying that the current stumbling block is the 2 claims (MFC/WWFC). What's the next move and whose move is it. Quantuma seem to have said that the 2 claims lack legitimacy. Does that put the ball back in the 2 clubs' court? Maybe it does..... you owe me money.... no I don't... in that case I'll see you in court? I'd be interested to read your views on this.
With regard to the legitimacy of the claims, it looks like the EFL are, to an extent backing Boro and Wycombe. On the other hand they are also looking at changing the rules so that clubs are not allowed to make such claims. Strange stance? I think we can all agree that what led to the current situation shouldn't happen again and that the rules need changing to ensure that it can't happen again. To that end I have written to the EFL suggesting they adopt the KNVB measures on this. In short, making a loss isn't the way to go. Before each season all clubs have to submit their budget for the upcoming season. Now much income? The figure has to be backed up with facts and forecasts, contracts etc on season ticket sales, sponsorship, advertising etc. The figure quoted has to be realistic or it won't be accepted. Outgoings have to be listed too. Wages, maintenance etc. Budgeting for a loss isn't allowed. If a budget gets rejected, clubs have to amend and resubmit including justification for any changes made. If a club makes a loss, which can happen to any company, for external reasons like Covid or falling gates because you had a poor season, that has to be taken into account in the following season's budget. Any losses have to be regained within 3 to 5 years and the new budgets have to show how and by when losses will be repaid. Continued submission of unbelievable or nonsensical budgets will lead to points deductions and at worst, having the licence to play revoked. I sincerely hope that the EFL adopts a similar policy so that no other club is able to find itself where we currently are. I'm hoping for a win this Saturday but think you'll take the points. One thing is certain, nobody expected the players to get us this close to safety with another 16 games to play. The Great Escape is looking on and Rooney, his staff and the players will deserve it if they can seal the deal.
PS - not been on for a couple of weeks, attempts at logging in failed. Did nothing different today but got in. BTW - I hope to play WWFC next season in the Championship.
Another good post @Raminpeace. Very interesting. Didn’t understand your comment though about hoping for a win on Saturday “but think you’ll take the points”.
@Raminpeace said:
I have written to the EFL suggesting they adopt the KNVB measures on this. In short, making a loss isn't the way to go. Before each season all clubs have to submit their budget for the upcoming season. Now much income? The figure has to be backed up with facts and forecasts, contracts etc on season ticket sales, sponsorship, advertising etc. The figure quoted has to be realistic or it won't be accepted. Outgoings have to be listed too. Wages, maintenance etc. Budgeting for a loss isn't allowed.
Personally I'd go one step further than this. I'd tell all clubs to submit their realistic budgets for the upcoming season within two weeks of the end of the play-off final. I would then create a mean budget for the 24 clubs in the league and make that the budget cap for every team. No team would be allowed to overspend - with a point deducted for every £100,000 they go over the limit. It would give every team a far greater chance of competing without letting the Sunderlands of this world buy their way to promotion. Any excess money generated by the bigger clubs can be returned to the shareholders or, preferably, put in a pot for redistribution into the community.
I would also change the rules so that each club's budget had to be scrutinised by an accountancy firm with no official links to the club - and with rigorous levels of oversight and transparency to ensure no-one could subvert that.
@HomerLone said:
I was curious as to when the ownership of Pride Park was transferred outside of the Derby County companies "structure".
Having just noticed this is in the rules regarding Administrators duties, I was curious if it was applicable.
"The liquidator or administrator can also apply to court seeking an order to restore any disposition of company property which contravenes the relevant provisions of the IA 1986, being IA 1986, s 127 (only in a compulsory liquidation) and IA 1986, ss 238, 239, 240 and 423—these are generally referred to as antecedent transactions. Therefore, a liquidator or administrator can make an application to court to unwind transactions entered into before the company was wound-up or entered into administration. Whether the particular transaction will be unwound will depend on its own circumstances".
Just a thought.
Thanks for this Homer. It's something we can push at Quantuma (DCFC Admins). I think we can all agree DCFC overspent big time. That's down to Mel in the main and in part tp Stephen Pearce who, as CEO, ought to have kept Mel in check or resigned, IMO. When Pearce resigned from the EFL board, his place was taken by one of the Middlesbrough directors. Both EFL and Quantuma appear to be saying that the current stumbling block is the 2 claims (MFC/WWFC). What's the next move and whose move is it. Quantuma seem to have said that the 2 claims lack legitimacy. Does that put the ball back in the 2 clubs' court? Maybe it does..... you owe me money.... no I don't... in that case I'll see you in court? I'd be interested to read your views on this.
With regard to the legitimacy of the claims, it looks like the EFL are, to an extent backing Boro and Wycombe. On the other hand they are also looking at changing the rules so that clubs are not allowed to make such claims. Strange stance? I think we can all agree that what led to the current situation shouldn't happen again and that the rules need changing to ensure that it can't happen again. To that end I have written to the EFL suggesting they adopt the KNVB measures on this. In short, making a loss isn't the way to go. Before each season all clubs have to submit their budget for the upcoming season. Now much income? The figure has to be backed up with facts and forecasts, contracts etc on season ticket sales, sponsorship, advertising etc. The figure quoted has to be realistic or it won't be accepted. Outgoings have to be listed too. Wages, maintenance etc. Budgeting for a loss isn't allowed. If a budget gets rejected, clubs have to amend and resubmit including justification for any changes made. If a club makes a loss, which can happen to any company, for external reasons like Covid or falling gates because you had a poor season, that has to be taken into account in the following season's budget. Any losses have to be regained within 3 to 5 years and the new budgets have to show how and by when losses will be repaid. Continued submission of unbelievable or nonsensical budgets will lead to points deductions and at worst, having the licence to play revoked. I sincerely hope that the EFL adopts a similar policy so that no other club is able to find itself where we currently are. I'm hoping for a win this Saturday but think you'll take the points. One thing is certain, nobody expected the players to get us this close to safety with another 16 games to play. The Great Escape is looking on and Rooney, his staff and the players will deserve it if they can seal the deal.
Afternoon Raminpeace,
Interesting ideas you have suggested to stop clubs being in DCFC's position in future. If say your ideas had been adopted, Derby County Football Club would have ceased to exist due to the accountancy over a 3/4 year period. Your budgets you would have wanted to be put before the League would have been rejected, you sold a stadium to balance books, valued at £40.1 million, then sold for £80.1 million to the main stakeholder Mel Morris and now oddly valued by the same person at £24.1 million which again leaves a surplus of £56 million.
Derby then sold the share premium within the club (on agreement with stakeholders) to again balance the books (leaving a share deficit of nearly £160 million). You paid for transfers using this new balance sheet you could clearly not afford and at one point were paying 156% more than your turnover on salaries alone. Therefore citing your own above rules would have received points deductions and the removal of your license, no?
I find it slightly interesting that you, being a Derby fan would now accept this suggestion after your club has skipped through many a loop hole to satisfy the EFL policies on accountancy.
Lastly, also interestingly enough you claim the administrators have blamed but us and Boro as the 'main' hold up to the takeover, yet Wycombe have yet to make a claim. Also the EFL have yet to confirm that Boro's claim is even a footballing debt/creditor and even on their own findings posted to Companies House there is no point these claims are recorded to stop a potential take over.
My thoughts on this, of course it's all down to opinion is the fact Mel Morris appointed the said administration company and has been looking after his own investments throughout the whole proceedings and unwilling to negotiate on his value for the sale of the stadium. The amount a prospective buyer would need to invest to bring the club out of administration far surpasses any amount paid for a club in your position, Sunderland AFC recently purchased with a bigger infrastructure and a larger pull locally for fans and stadium sold for nearly half. That's the issue, not us nor Boro, but the reluctance of the previous owner in foregoing his assets within a favourable deal.
Looks to me as if Derby will finish the season, probably play their way out of the relegation zone thereby consigning both Reading and Peterborough to the drop and post-season they will be wound up. I hope Mel Morris at least does better by the phoenix club than Steve Dale has done by Bury’s team.
One small issue Maskell, if these rules had been in place Mel wouldn't have been able to do what he did so we wouldn't have overspent in the way we did. So there would have been no fines, no points deductions or rescinding of the licence. Wycombe may not have made a claim as yet but the EFL has already said that both claims would be seen as football debt. That when there is thus far no agreement that there is a debt, footballing or otherwise. How about the legitimacy of any claim from Boro/WW? The EFL are looking to change their rules so clubs can't make such claims against one another. If they don't want such claims in the future, why would they sanction the Boro/WW claims? Again, not looking to cause trouble, merely interested on other fans thoughts.
With regard to Mel having appointed Quantuma, it is generally the owner of a company going into Admin who appoints the Administrators. If Mel is pulling the strings, doesn't that mean that the Administrators aren't behaving as they should with their main priority being looking after the creditors? Mel is a creditor, to the extent of £140M. An amount he has said he will write off when we exit Admin.
@micra said:
Another good post @Raminpeace. Very interesting. Didn’t understand your comment though about hoping for a win on Saturday “but think you’ll take the points”.
My bad. I've posted that on a Boro forum as well. That comment was aimed at them. I should have edited it out.
I didn't once state Mel Morris was pulling any strings, i confirmed the administrators have been appointed by the sole stakeholder in the companies that have been ultimately placed under administration. If Mel couldn't afford the companies due to the loss of 54% revenue and not being able to find the £30-45 million he was pumping into the club why hasn't he walked away from the stadium where the club plays it's home games at? Why is he still involved, why is Stephen Pearce still active in his role as accountant on Companies House?
Why should we as the tax payer bail out a person who has single handily ruined a club, companies involved and ruined probably countless creditors including caterers, cleaners, pensions funds and more for him to happily ride off into the sunset when someone buys the club and pays him for the stadium?
Can you see where i'm going with this? The punishment is not harsh enough, you took 9 points. (12 for taking the administration route) which is a back door to clearing the decks and starting again avoiding any creditor. This is the stumbling block, why should Derby be any different to any other football club or business? If the claim to pay 25p to every pound is allowed, the other 71 clubs as part of the EFL will claim the same, HMRC & PAYE will not be bullied into that, why should two clubs, Wycombe, Boro if seen as football debt also back down? Derby have systematically cheated and still continue to do so remaining in administration to avoid any further penalty. Also may i add the club have been granted YET another extension to publish their accounts, my bet and it would be a large bet these accounts make for even more grim reading.
Finally Mel's empty statement to allow both parties to sue him individually is also a kick to the face for the creditors awaiting a decision. So one minute he cannot afford a business, ultimately decided to run away and place things into administration yet can back a potential claim of "£40 million" i don't think so.
@HomerLone said:
I was curious as to when the ownership of Pride Park was transferred outside of the Derby County companies "structure".
Having just noticed this is in the rules regarding Administrators duties, I was curious if it was applicable.
"The liquidator or administrator can also apply to court seeking an order to restore any disposition of company property which contravenes the relevant provisions of the IA 1986, being IA 1986, s 127 (only in a compulsory liquidation) and IA 1986, ss 238, 239, 240 and 423—these are generally referred to as antecedent transactions. Therefore, a liquidator or administrator can make an application to court to unwind transactions entered into before the company was wound-up or entered into administration. Whether the particular transaction will be unwound will depend on its own circumstances".
Just a thought.
Thanks for this Homer. It's something we can push at Quantuma (DCFC Admins). I think we can all agree DCFC overspent big time. That's down to Mel in the main and in part tp Stephen Pearce who, as CEO, ought to have kept Mel in check or resigned, IMO. When Pearce resigned from the EFL board, his place was taken by one of the Middlesbrough directors. Both EFL and Quantuma appear to be saying that the current stumbling block is the 2 claims (MFC/WWFC). What's the next move and whose move is it. Quantuma seem to have said that the 2 claims lack legitimacy. Does that put the ball back in the 2 clubs' court? Maybe it does..... you owe me money.... no I don't... in that case I'll see you in court? I'd be interested to read your views on this.
With regard to the legitimacy of the claims, it looks like the EFL are, to an extent backing Boro and Wycombe. On the other hand they are also looking at changing the rules so that clubs are not allowed to make such claims. Strange stance? I think we can all agree that what led to the current situation shouldn't happen again and that the rules need changing to ensure that it can't happen again. To that end I have written to the EFL suggesting they adopt the KNVB measures on this. In short, making a loss isn't the way to go. Before each season all clubs have to submit their budget for the upcoming season. Now much income? The figure has to be backed up with facts and forecasts, contracts etc on season ticket sales, sponsorship, advertising etc. The figure quoted has to be realistic or it won't be accepted. Outgoings have to be listed too. Wages, maintenance etc. Budgeting for a loss isn't allowed. If a budget gets rejected, clubs have to amend and resubmit including justification for any changes made. If a club makes a loss, which can happen to any company, for external reasons like Covid or falling gates because you had a poor season, that has to be taken into account in the following season's budget. Any losses have to be regained within 3 to 5 years and the new budgets have to show how and by when losses will be repaid. Continued submission of unbelievable or nonsensical budgets will lead to points deductions and at worst, having the licence to play revoked. I sincerely hope that the EFL adopts a similar policy so that no other club is able to find itself where we currently are. I'm hoping for a win this Saturday but think you'll take the points. One thing is certain, nobody expected the players to get us this close to safety with another 16 games to play. The Great Escape is looking on and Rooney, his staff and the players will deserve it if they can seal the deal.
Little surprised to read that showing how your doing to get through the season isn’t already one of the things clubs have to do anyway, particularly as we were told we would need to submit a full costing plan on how we would survive in the premier league if we were to be promoted.
Were we the only ones that had to do that as a team that was newly promoted, or do all teams in the Championship have to do that?
1) Who instigated the non-payment of HMRC bills?
2) who signed off / was complicit in the non payment of HMRC bills?
3) why is Stephen Pearce still involved? Because as CEO he must have been part of questions 1) or 2). And if not why didn’t he resign when it came to light
@Raminpeace said:
How about the legitimacy of any claim from Boro/WW? The EFL are looking to change their rules so clubs can't make such claims against one another. If they don't want such claims in the future, why would they sanction the Boro/WW claims? Again, not looking to cause trouble, merely interested on other fans thoughts.
I'm not sure the EFL are sanctioning the claims as such, they just can't legally stand in their way.
I have not seen anything to suggest that the EFL are looking to make rule changes to prevent clubs from seeking redress from other clubs, what's the source?
@Raminpeace - Good to hear from you again. I think the other posters have addressed the points you made about the administrators better than I can, though I'm definitely in agreement about rules about clubs having to submit future budgets and previous accounts in an orderly manner, or else be refused entry into the following season's league.
I'm guessing by KNVB you mean the Dutch FA, and that their rules aren't dissimilar to the ones the German Football League (DFL) have in place where clubs who cannot provide proof of funds to complete a season, or falsify documents that they use to back this up, or fail to submit these at all (which is central to Couhig's claim against DCFC), then they are simply refused a licence to take part at that level. Often this results in clubs being demoted to their nearest regional league in the fourth tier, or federal state league in the fifth tier. Some Gasroomers on here were laughing that off as just 'rules', but in my opinion is a reason why the German league is far more stable and better run than the financial shitshow that is the Championship. I would support similar rules in the Football League, and would add to that that teams found guilty of breaching FFP should be denied promotion to the Premier League, as the money from being in the Premier League is ultimately the driver for the kamikaze budgeting that is making the Championship a laughing stock.
If those rules were in place AND strictly followed (the FL might need some lessons on that), the likes of Mel Morris wouldn't have gone anywhere near an English professional club if their aim was to game the system to the extent he did. It won't be 100% effective , some German clubs become insolvent too but it is far more infrequent and the punishments in place mean clubs take far more care to budget sustainably. A situation like Derby's is pretty much unthinkable with the safeguards they have in place.
Really interested as to where you get the "Mel Morris is a creditor for £140M" from @Raminpeace. I've not seen that mentioned anywhere else before.
It's also about twice what everyone else is owed - ignoring the claims from WWFC & MFC.
So if it's really true, surely you can see why we're having a hard time accepting that it's the claims from WWFC & MFC - about £70M tops - which are the stumbling blocks to a settlement?
@ReadingMarginalista said: @Raminpeace - Good to hear from you again. I think the other posters have addressed the points you made about the administrators better than I can, though I'm definitely in agreement about rules about clubs having to submit future budgets and previous accounts in an orderly manner, or else be refused entry into the following season's league.
I'm guessing by KNVB you mean the Dutch FA, and that their rules aren't dissimilar to the ones the German Football League (DFL) have in place where clubs who cannot provide proof of funds to complete a season, or falsify documents that they use to back this up, or fail to submit these at all (which is central to Couhig's claim against DCFC), then they are simply refused a licence to take part at that level. Often this results in clubs being demoted to their nearest regional league in the fourth tier, or federal state league in the fifth tier. Some Gasroomers on here were laughing that off as just 'rules', but in my opinion is a reason why the German league is far more stable and better run than the financial shitshow that is the Championship. I would support similar rules in the Football League, and would add to that that teams found guilty of breaching FFP should be denied promotion to the Premier League, as the money from being in the Premier League is ultimately the driver for the kamikaze budgeting that is making the Championship a laughing stock.
If those rules were in place AND strictly followed (the FL might need some lessons on that), the likes of Mel Morris wouldn't have gone anywhere near an English professional club if their aim was to game the system to the extent he did. It won't be 100% effective , some German clubs become insolvent too but it is far more infrequent and the punishments in place mean clubs take far more care to budget sustainably. A situation like Derby's is pretty much unthinkable with the safeguards they have in place.
@Twizz said:
FWIW the figures reported for main creditors were something like
HMRC - £30M
Football creditors - £10 M
MSC - £20M
There is mention in one of the companies (Gellaw Newco 203) of a Directors Loan Account with a deficit of £123M, I'm assuming this was monies loaned by MM.
The administrators "estimated to realise" amount for this company shows as a deficiency of £143M...
Interesting that the Administrators seem to have estimated their fees/expenses at £12M up until Sept 2022. I'm obviously in the wrong job.
@Twizz said:
FWIW the figures reported for main creditors were something like
HMRC - £30M
Football creditors - £10 M
MSC - £20M
There is mention in one of the companies (Gellaw Newco 203) of a Directors Loan Account with a deficit of £123M, I'm assuming this was monies loaned by MM.
The administrators "estimated to realise" amount for this company shows as a deficiency of £143M...
Interesting that the Administrators seem to have estimated their fees/expenses at £12M up until Sept 2022. I'm obviously in the wrong job.
Am I right in thinking then that the estimated Derby Administrators fees for the year are comparable to the entire budget for operating Wycombe Wanderers for the year? If so that is a fact for some of the more partisan Derby fans to consider when deciding who is exploiting who.
The Derby Administrators' fees are more than the value of the club. A mid-table club whose only assets are the players under limited term contracts and doesn't own its own ground is really worth fuck all. It's no wonder they can't find a buyer.
Lots of points/questions there. I'll try to answer/explain.....
The Boro/WW issue. It is a stumbling block because, apparently, none of the bidders is prepared to sign on the dotted line until they KNOW how much, if anything, is owed to the 2 clubs.
Congo asked why Mel doesn't simply write off the £140M now. That's one of the things fans want to know. Not being au fait with the full ins and outs of Admin, I don't know. Maybe he's not allowed to under Law and/or EFL rules? Maybe Maskell can clue us in on that.
Ed_ I read that online (EFL rule changes to prevent a repeat) a week or so ago. Can't find the link at the moment but if I find it again, I'll get back to you.
Twizz. When Admins move into a business they have something like 8 weeks to publish the state of play including who is owed what. My source for the £140M is the Quantuma statement of the total debts.
The Admin fees do, indeed, look like they are running at £1M a month. Way too much? They are, apparently, billing all DCFC related work at £350 an hour. That's 2857 man hours a month. Going on a 40 hour working week, they must have 71 people working on the "deal". Hopefully, we'll be out of Admin well before September 2022 but, under EFL rules, it could last until February 2023..... I sincerely hope not.
I think by MSC you mean MSD. They have a £20M charge on the stadium and Mel is the personal guarantor for that amount, not DCFC, to the best of my knowledge. Since those figures were released, Quantuma have allegedly borrowed more to cover running costs to the end of the season, from MSD. I estimate that amount to be around £10m to £12M. It's a sorry state of affairs, agreed.
@Raminpeace said:
Lots of points/questions there. I'll try to answer/explain.....
The Boro/WW issue. It is a stumbling block because, apparently, none of the bidders is prepared to sign on the dotted line until they KNOW how much, if anything, is owed to the 2 clubs.
Congo asked why Mel doesn't simply write off the £140M now. That's one of the things fans want to know. Not being au fait with the full ins and outs of Admin, I don't know. Maybe he's not allowed to under Law and/or EFL rules? Maybe Maskell can clue us in on that.
Ed_ I read that online (EFL rule changes to prevent a repeat) a week or so ago. Can't find the link at the moment but if I find it again, I'll get back to you.
Twizz. When Admins move into a business they have something like 8 weeks to publish the state of play including who is owed what. My source for the £140M is the Quantuma statement of the total debts.
The Admin fees do, indeed, look like they are running at £1M a month. Way too much? They are, apparently, billing all DCFC related work at £350 an hour. That's 2857 man hours a month. Going on a 40 hour working week, they must have 71 people working on the "deal". Hopefully, we'll be out of Admin well before September 2022 but, under EFL rules, it could last until February 2023..... I sincerely hope not.
I think by MSC you mean MSD. They have a £20M charge on the stadium and Mel is the personal guarantor for that amount, not DCFC, to the best of my knowledge. Since those figures were released, Quantuma have allegedly borrowed more to cover running costs to the end of the season, from MSD. I estimate that amount to be around £10m to £12M. It's a sorry state of affairs, agreed.
Fair comments, regarding Mel writing off the debt? Imagine the scene at Pride Park and the EFL. Mel appoints administrators last year citing the concerns he can no longer fund the club or meet the demands of the creditors. Advised the only viable option available to him is indeed putting the companies under his control into administration.
After months of negotiation, costs to compile a forensic look into accounts by administrators, causing no end of turmoil to the Derby fanbase. Mel then turns around and says, "I've changed my mind i can now fulfil my responsibilities and cover the liabilities now."
His main reason for putting the companies into administration was to clear the decks and walk away from his responsibilities and clear the slate for Derby County FC. This is the main point no Derby fan i have spoken to can understand or grasp. It's legally cheating in a way, now I'm no fan of playing football through the courts but i believe us and Boro know this, hence the strongly worded statement from Gibson that questions "what's in it for Mel? Is he providing anything towards the shortfall?" Looking from the outside in, it's clear as day Mel's idea was to simply ignore Boro and at a lesser extent ourselves to do a runner via the stage exit, clear his debts and he assumed Derby would be fine. I can see from his rather desperate statement to allow Boro and us to take him to court that his idea hasn't exactly worked to plan and he's panicking.
If the Administrators fees are approximately £1m a month, surely it is in their interests to prolong the saga as long as they can. Why aren't there some government regulations in place to review Administrators bills to ensure they are reasonable?
Could not the Administrators negotiate a compensation limit with Boro and ourselves without admitting liability which could be decided at a later date by a method all parties could agree with the help of the EFL. thus allowing any purchaser the ability to factor that cost in. It seems crazy to ignore Rob when he’s made it public that he’s open to dialogue
Comments
Good evening NiceCarrots, hope you're well?
I didn't want to give the impression Mr.Stephen Pearce is working for the administrators, i was merely pointing out he's still active in accounts as an "accountant" while the club is in administration.
I don't want to confuse anything here, i was just highlighting the fact if a number of people were responsible for a situation, that situation went wrong i don't think i would want them to play any role in a viable solution to move forward.
Thanks for this Homer. It's something we can push at Quantuma (DCFC Admins). I think we can all agree DCFC overspent big time. That's down to Mel in the main and in part tp Stephen Pearce who, as CEO, ought to have kept Mel in check or resigned, IMO. When Pearce resigned from the EFL board, his place was taken by one of the Middlesbrough directors. Both EFL and Quantuma appear to be saying that the current stumbling block is the 2 claims (MFC/WWFC). What's the next move and whose move is it. Quantuma seem to have said that the 2 claims lack legitimacy. Does that put the ball back in the 2 clubs' court? Maybe it does..... you owe me money.... no I don't... in that case I'll see you in court? I'd be interested to read your views on this.
With regard to the legitimacy of the claims, it looks like the EFL are, to an extent backing Boro and Wycombe. On the other hand they are also looking at changing the rules so that clubs are not allowed to make such claims. Strange stance? I think we can all agree that what led to the current situation shouldn't happen again and that the rules need changing to ensure that it can't happen again. To that end I have written to the EFL suggesting they adopt the KNVB measures on this. In short, making a loss isn't the way to go. Before each season all clubs have to submit their budget for the upcoming season. Now much income? The figure has to be backed up with facts and forecasts, contracts etc on season ticket sales, sponsorship, advertising etc. The figure quoted has to be realistic or it won't be accepted. Outgoings have to be listed too. Wages, maintenance etc. Budgeting for a loss isn't allowed. If a budget gets rejected, clubs have to amend and resubmit including justification for any changes made. If a club makes a loss, which can happen to any company, for external reasons like Covid or falling gates because you had a poor season, that has to be taken into account in the following season's budget. Any losses have to be regained within 3 to 5 years and the new budgets have to show how and by when losses will be repaid. Continued submission of unbelievable or nonsensical budgets will lead to points deductions and at worst, having the licence to play revoked. I sincerely hope that the EFL adopts a similar policy so that no other club is able to find itself where we currently are. I'm hoping for a win this Saturday but think you'll take the points. One thing is certain, nobody expected the players to get us this close to safety with another 16 games to play. The Great Escape is looking on and Rooney, his staff and the players will deserve it if they can seal the deal.
PS - not been on for a couple of weeks, attempts at logging in failed. Did nothing different today but got in. BTW - I hope to play WWFC next season in the Championship.
Another good post @Raminpeace. Very interesting. Didn’t understand your comment though about hoping for a win on Saturday “but think you’ll take the points”.
Personally I'd go one step further than this. I'd tell all clubs to submit their realistic budgets for the upcoming season within two weeks of the end of the play-off final. I would then create a mean budget for the 24 clubs in the league and make that the budget cap for every team. No team would be allowed to overspend - with a point deducted for every £100,000 they go over the limit. It would give every team a far greater chance of competing without letting the Sunderlands of this world buy their way to promotion. Any excess money generated by the bigger clubs can be returned to the shareholders or, preferably, put in a pot for redistribution into the community.
I would also change the rules so that each club's budget had to be scrutinised by an accountancy firm with no official links to the club - and with rigorous levels of oversight and transparency to ensure no-one could subvert that.
Afternoon Raminpeace,
Interesting ideas you have suggested to stop clubs being in DCFC's position in future. If say your ideas had been adopted, Derby County Football Club would have ceased to exist due to the accountancy over a 3/4 year period. Your budgets you would have wanted to be put before the League would have been rejected, you sold a stadium to balance books, valued at £40.1 million, then sold for £80.1 million to the main stakeholder Mel Morris and now oddly valued by the same person at £24.1 million which again leaves a surplus of £56 million.
Derby then sold the share premium within the club (on agreement with stakeholders) to again balance the books (leaving a share deficit of nearly £160 million). You paid for transfers using this new balance sheet you could clearly not afford and at one point were paying 156% more than your turnover on salaries alone. Therefore citing your own above rules would have received points deductions and the removal of your license, no?
I find it slightly interesting that you, being a Derby fan would now accept this suggestion after your club has skipped through many a loop hole to satisfy the EFL policies on accountancy.
Lastly, also interestingly enough you claim the administrators have blamed but us and Boro as the 'main' hold up to the takeover, yet Wycombe have yet to make a claim. Also the EFL have yet to confirm that Boro's claim is even a footballing debt/creditor and even on their own findings posted to Companies House there is no point these claims are recorded to stop a potential take over.
My thoughts on this, of course it's all down to opinion is the fact Mel Morris appointed the said administration company and has been looking after his own investments throughout the whole proceedings and unwilling to negotiate on his value for the sale of the stadium. The amount a prospective buyer would need to invest to bring the club out of administration far surpasses any amount paid for a club in your position, Sunderland AFC recently purchased with a bigger infrastructure and a larger pull locally for fans and stadium sold for nearly half. That's the issue, not us nor Boro, but the reluctance of the previous owner in foregoing his assets within a favourable deal.
Looks to me as if Derby will finish the season, probably play their way out of the relegation zone thereby consigning both Reading and Peterborough to the drop and post-season they will be wound up. I hope Mel Morris at least does better by the phoenix club than Steve Dale has done by Bury’s team.
One small issue Maskell, if these rules had been in place Mel wouldn't have been able to do what he did so we wouldn't have overspent in the way we did. So there would have been no fines, no points deductions or rescinding of the licence. Wycombe may not have made a claim as yet but the EFL has already said that both claims would be seen as football debt. That when there is thus far no agreement that there is a debt, footballing or otherwise. How about the legitimacy of any claim from Boro/WW? The EFL are looking to change their rules so clubs can't make such claims against one another. If they don't want such claims in the future, why would they sanction the Boro/WW claims? Again, not looking to cause trouble, merely interested on other fans thoughts.
With regard to Mel having appointed Quantuma, it is generally the owner of a company going into Admin who appoints the Administrators. If Mel is pulling the strings, doesn't that mean that the Administrators aren't behaving as they should with their main priority being looking after the creditors? Mel is a creditor, to the extent of £140M. An amount he has said he will write off when we exit Admin.
My bad. I've posted that on a Boro forum as well. That comment was aimed at them. I should have edited it out.
I didn't once state Mel Morris was pulling any strings, i confirmed the administrators have been appointed by the sole stakeholder in the companies that have been ultimately placed under administration. If Mel couldn't afford the companies due to the loss of 54% revenue and not being able to find the £30-45 million he was pumping into the club why hasn't he walked away from the stadium where the club plays it's home games at? Why is he still involved, why is Stephen Pearce still active in his role as accountant on Companies House?
Why should we as the tax payer bail out a person who has single handily ruined a club, companies involved and ruined probably countless creditors including caterers, cleaners, pensions funds and more for him to happily ride off into the sunset when someone buys the club and pays him for the stadium?
Can you see where i'm going with this? The punishment is not harsh enough, you took 9 points. (12 for taking the administration route) which is a back door to clearing the decks and starting again avoiding any creditor. This is the stumbling block, why should Derby be any different to any other football club or business? If the claim to pay 25p to every pound is allowed, the other 71 clubs as part of the EFL will claim the same, HMRC & PAYE will not be bullied into that, why should two clubs, Wycombe, Boro if seen as football debt also back down? Derby have systematically cheated and still continue to do so remaining in administration to avoid any further penalty. Also may i add the club have been granted YET another extension to publish their accounts, my bet and it would be a large bet these accounts make for even more grim reading.
Finally Mel's empty statement to allow both parties to sue him individually is also a kick to the face for the creditors awaiting a decision. So one minute he cannot afford a business, ultimately decided to run away and place things into administration yet can back a potential claim of "£40 million" i don't think so.
Forgive my ignorance, but why doesn't he just write it off now?
Little surprised to read that showing how your doing to get through the season isn’t already one of the things clubs have to do anyway, particularly as we were told we would need to submit a full costing plan on how we would survive in the premier league if we were to be promoted.
Were we the only ones that had to do that as a team that was newly promoted, or do all teams in the Championship have to do that?
The notion that a few more rules would have prevented Mel Morris from pursuing his intended course of action is laughable.
Agreed most big organisations have an army of lawyers and accountants to find the loopholes and opportunities in poorly drafted rules and legislation.
@Raminpeace
A few questions
1) Who instigated the non-payment of HMRC bills?
2) who signed off / was complicit in the non payment of HMRC bills?
3) why is Stephen Pearce still involved? Because as CEO he must have been part of questions 1) or 2). And if not why didn’t he resign when it came to light
Mr Maskell….well wow, quality postings.
I'm not sure the EFL are sanctioning the claims as such, they just can't legally stand in their way.
I have not seen anything to suggest that the EFL are looking to make rule changes to prevent clubs from seeking redress from other clubs, what's the source?
@Raminpeace - Good to hear from you again. I think the other posters have addressed the points you made about the administrators better than I can, though I'm definitely in agreement about rules about clubs having to submit future budgets and previous accounts in an orderly manner, or else be refused entry into the following season's league.
I'm guessing by KNVB you mean the Dutch FA, and that their rules aren't dissimilar to the ones the German Football League (DFL) have in place where clubs who cannot provide proof of funds to complete a season, or falsify documents that they use to back this up, or fail to submit these at all (which is central to Couhig's claim against DCFC), then they are simply refused a licence to take part at that level. Often this results in clubs being demoted to their nearest regional league in the fourth tier, or federal state league in the fifth tier. Some Gasroomers on here were laughing that off as just 'rules', but in my opinion is a reason why the German league is far more stable and better run than the financial shitshow that is the Championship. I would support similar rules in the Football League, and would add to that that teams found guilty of breaching FFP should be denied promotion to the Premier League, as the money from being in the Premier League is ultimately the driver for the kamikaze budgeting that is making the Championship a laughing stock.
If those rules were in place AND strictly followed (the FL might need some lessons on that), the likes of Mel Morris wouldn't have gone anywhere near an English professional club if their aim was to game the system to the extent he did. It won't be 100% effective , some German clubs become insolvent too but it is far more infrequent and the punishments in place mean clubs take far more care to budget sustainably. A situation like Derby's is pretty much unthinkable with the safeguards they have in place.
Really interested as to where you get the "Mel Morris is a creditor for £140M" from @Raminpeace. I've not seen that mentioned anywhere else before.
It's also about twice what everyone else is owed - ignoring the claims from WWFC & MFC.
So if it's really true, surely you can see why we're having a hard time accepting that it's the claims from WWFC & MFC - about £70M tops - which are the stumbling blocks to a settlement?
FWIW the figures reported for main creditors were something like
HMRC - £30M
Football creditors - £10 M
MSC - £20M
Excellent post
There is mention in one of the companies (Gellaw Newco 203) of a Directors Loan Account with a deficit of £123M, I'm assuming this was monies loaned by MM.
The administrators "estimated to realise" amount for this company shows as a deficiency of £143M...
Interesting that the Administrators seem to have estimated their fees/expenses at £12M up until Sept 2022. I'm obviously in the wrong job.
Am I right in thinking then that the estimated Derby Administrators fees for the year are comparable to the entire budget for operating Wycombe Wanderers for the year? If so that is a fact for some of the more partisan Derby fans to consider when deciding who is exploiting who.
The Derby Administrators' fees are more than the value of the club. A mid-table club whose only assets are the players under limited term contracts and doesn't own its own ground is really worth fuck all. It's no wonder they can't find a buyer.
Lots of points/questions there. I'll try to answer/explain.....
The Boro/WW issue. It is a stumbling block because, apparently, none of the bidders is prepared to sign on the dotted line until they KNOW how much, if anything, is owed to the 2 clubs.
Congo asked why Mel doesn't simply write off the £140M now. That's one of the things fans want to know. Not being au fait with the full ins and outs of Admin, I don't know. Maybe he's not allowed to under Law and/or EFL rules? Maybe Maskell can clue us in on that.
Ed_ I read that online (EFL rule changes to prevent a repeat) a week or so ago. Can't find the link at the moment but if I find it again, I'll get back to you.
Twizz. When Admins move into a business they have something like 8 weeks to publish the state of play including who is owed what. My source for the £140M is the Quantuma statement of the total debts.
The Admin fees do, indeed, look like they are running at £1M a month. Way too much? They are, apparently, billing all DCFC related work at £350 an hour. That's 2857 man hours a month. Going on a 40 hour working week, they must have 71 people working on the "deal". Hopefully, we'll be out of Admin well before September 2022 but, under EFL rules, it could last until February 2023..... I sincerely hope not.
I think by MSC you mean MSD. They have a £20M charge on the stadium and Mel is the personal guarantor for that amount, not DCFC, to the best of my knowledge. Since those figures were released, Quantuma have allegedly borrowed more to cover running costs to the end of the season, from MSD. I estimate that amount to be around £10m to £12M. It's a sorry state of affairs, agreed.
Fair comments, regarding Mel writing off the debt? Imagine the scene at Pride Park and the EFL. Mel appoints administrators last year citing the concerns he can no longer fund the club or meet the demands of the creditors. Advised the only viable option available to him is indeed putting the companies under his control into administration.
After months of negotiation, costs to compile a forensic look into accounts by administrators, causing no end of turmoil to the Derby fanbase. Mel then turns around and says, "I've changed my mind i can now fulfil my responsibilities and cover the liabilities now."
His main reason for putting the companies into administration was to clear the decks and walk away from his responsibilities and clear the slate for Derby County FC. This is the main point no Derby fan i have spoken to can understand or grasp. It's legally cheating in a way, now I'm no fan of playing football through the courts but i believe us and Boro know this, hence the strongly worded statement from Gibson that questions "what's in it for Mel? Is he providing anything towards the shortfall?" Looking from the outside in, it's clear as day Mel's idea was to simply ignore Boro and at a lesser extent ourselves to do a runner via the stage exit, clear his debts and he assumed Derby would be fine. I can see from his rather desperate statement to allow Boro and us to take him to court that his idea hasn't exactly worked to plan and he's panicking.
If the Administrators fees are approximately £1m a month, surely it is in their interests to prolong the saga as long as they can. Why aren't there some government regulations in place to review Administrators bills to ensure they are reasonable?
Gellaw Newco 203, incorporated 18th June 2018 with a single active director Mr M Morris. Last accounts submitted in 2020, missed June 2021 submission.
I'm sure that wasn't a vehicle designed to obscure the £140M deficit then.
Still, just carry on blaming WWFC & MFC for Derbys woes.
Could not the Administrators negotiate a compensation limit with Boro and ourselves without admitting liability which could be decided at a later date by a method all parties could agree with the help of the EFL. thus allowing any purchaser the ability to factor that cost in. It seems crazy to ignore Rob when he’s made it public that he’s open to dialogue